Between December 3 and 7, 2013, the World Trade Organization (WTO) held its Ninth Ministerial Conference in Bali, Indonesia. At the end, trade ministers from approximately 159 countries adopted the “Bali Package”, which represents a set of decisions geared toward improving trade facilitation, providing developing countries with more options for safeguarding food security, boosting least developed countries’ trade and enhancing development.
The “Bali Package” is a significant landmark in the WTO’s history as it is the first comprehensive agreement struck by the Geneva-based body since its founding in 1995. The various decisions arrived at in Bali are not only important for the credibility of the WTO, however. They also hold out some important prospects for Barbados.
This submission would focus primarily on the trade facilitation aspect of the “Bali Package”. President Barack Obama of the United States (US) has hailed the decision on trade facilitation as “the centrepiece of the agreement reached in Bali”.
Essentially, the decision on trade facilitation aims to ease barriers to trade by simplifying customs procedures and making them more transparent. In other words, the intention is to reduce the costs and long delays involved in global trade and make it much easier for businesses to trade across borders by cutting “red tape”.
Each year, the World Bank and the International Finance Corporation (IFC) publish a Doing Business report which seeks to highlight how some world economies are performing on several indicators such as trading across borders.
The World Bank/IFC Doing Business Report 2014 indicates that it takes nine days to export from Barbados and eight days to import into Barbados.
For both processes, a significant portion of time is used up in the preparation of documentation. If a country such as Barbados can put measures in place to simplify customs bureaucracy by simplifying, reforming and clarifying customs procedures, this would bring tremendous benefits to the business community. One of the major benefits to the business community of simplifying, reforming and clarifying customs procedures would be to facilitate easier exportation from Barbados to other markets.
If Barbados were to undertake the necessary reforms needed at Customs to expedite import and export procedures, this would also make the island even more appealing to foreign investors. In essence, such reforms will send a strong signal to investors that their goods will have ease of mobility in and out of Barbados.
What also makes the Bali Decision on Trade Facilitation even more interesting is that, as part of the agreement, Barbados and other small vulnerable economies are supposed to receive assistance from the World Bank, the European Union and the Organization for Economic Cooperation and Development in the development of infrastructure and training toward enhanced trade facilitation procedures.
However, if there is one criticism that can be levelled against what took place in Bali, it is that the organizations from which assistance should be forthcoming are not legally bound to undertake such a commitment. Similarly, it would also appear that WTO members are also not legally bound to undertake the necessary trade facilitation reforms aimed at improving the private sector’s ability to trade with the outside world with relative ease.
Nonetheless, we caution that should Barbados not undertake relevant reforms to improve trade facilitation, it would be poorer for it. Therefore, the relevant international agencies should stand by their commitments to provide assistance to developing countries to undertake the necessary reforms and in the same vein, Barbados and its developing country partners must also demonstrate serious commitment to the cause.
• Joel Richards is a former trade consultant with the Barbados Private Sector Trade Team.
